Ten good reasons to call off the union

And where would General Motors' workers be without the Union of Automobile Workers? Probably in well-paid secure employment, suggests George Reisman. So who's ultimately to blame then for their present predicament, and for that of Ford and Chrysler as well? Can you guess?

Few things are more obvious than that the role of the UAW in relation to General Motors has been that of a swarm of bloodsucking leeches, a swarm that will not stop until its prey exists no more.

It is difficult to believe that people who have been neither lobotomized nor castrated would not rise up and demand that these leeches finally be pulled off!

Perhaps the American people do not rise up, because they have never seen General Motors, or any other major American business, rise up and dare to assert the philosophical principle of private property rights and individual freedom and proceed to pull the leeches off in the name of that principle...

One of the ugliest consequences of the loss of economic freedom and respect for property rights is that it makes such spinelessness and gutlessness on the part of businessmen—such amorality—a requirement of succeeding in business.

It's GM's (and Ford's and Chrysler's) vast army of past workers (from when car manufacturing was much more labour intensive) which is their big financial drag, compared with other auto manufacturers, not excessive demands by the much smaller group of present workers.

GM et al signed contracts promising they'd provide pensions and retirement health care to their workers. Ford led the way in that policy (and not because of union demands - it was an attempt to make skilled labour stay with Ford).

But then they never put enough money aside to cover that. Managers made better profits (and so got better bonusses) if they stinted on that - and hey, no-one would notice for 30 years and by then that Manager would be long gone. Estimates of future health care costs were always much lower than reality.

Now they're trying to wriggle out of their old contracts. For example, by spinning off parts-manufacturing arm Delphi, handing it half the liabilities, then declaring Delphi broke.

The managers 30 years ago failed to live up to their contractual obligations, and screwed the workers in doing so. The unions now have a choice. Do they keep fighting to keep the corporates honest and keep support for retired workers intact - or do the unions go with the managers and throw the retirees to the wolves to keep current workers' jobs intact?

Underlying this is issue is that the private US health system is insanely expensive (by far the most expensive health care system in the world). GM can't afford it.

This is why we have GM, Ford, etc, calling for the US to move to public health care. Because private industry can't afford the current US health system.

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Comments on this post

Ten good reasons to call off the union
The management of the auto companies must share some of the blame. They agreed to the union's demands.

At that time US auto companies dominated the market and they believed that would continue and they could easily afford the costs.

The unions were simply doing what was best for their members, as they saw it.
Your whole post is based on a factual error.

It's GM's (and Ford's and Chrysler's) vast army of past workers (from when car manufacturing was much more labour intensive) which is their big financial drag, compared with other auto manufacturers, not excessive demands by the much smaller group of present workers.

GM et al signed contracts promising they'd provide pensions and retirement health care to their workers. Ford led the way in that policy (and not because of union demands - it was an attempt to make skilled labour stay with Ford).

But then they never put enough money aside to cover that. Managers made better profits (and so got better bonusses) if they stinted on that - and hey, no-one would notice for 30 years and by then that Manager would be long gone. Estimates of future health care costs were always much lower than reality.

Now they're trying to wriggle out of their old contracts. For example, by spinning off parts-manufacturing arm Delphi, handing it half the liabilities, then declaring Delphi broke.

The managers 30 years ago failed to live up to their contractual obligations, and screwed the workers in doing so. The unions now have a choice. Do they keep fighting to keep the corporates honest and keep support for retired workers intact - or do the unions go with the managers and throw the retirees to the wolves to keep current workers' jobs intact?

Underlying this is issue is that the private US health system is insanely expensive (by far the most expensive health care system in the world). GM can't afford it.

This is why we have GM, Ford, etc, calling for the US to move to public health care. Because private industry can't afford the current US health system.